Favorable cost development and slightly improved operating result for airberlin in the first quarter. Turbine turnaround program clearly reduced costs.Costs per available seat kilometer (CASK) reduced by more than eight per cent.
Earnings (EBIT) slightly improved, turnover slightly lower due to the Easter business falling in the second quarter. Wider flight selection and a smaller fleet increased productivity. Partnerships continue to show very favorable developments .
Recapitalization with an inflow of ca. EUR 550 million successfully concluded. Restructuring for ensuring sustainable profitability kicked-off in May
airberlin’s operating result for the first quarter of 2014 in a difficult market environment with high pressure on capacity utilization and yield was slightly better than that of the previous year. In particular, the effects of the Turbine turnaround program led to a clear cost reduction. As a result, airberlin was able to reduce the cost per available seat kilometer (CASK), excluding fuel cost, by 8.2% over the corresponding quarter of the previous year. In this manner, especially aircraft costs and airport infrastructure costs were reduced due to productivity increase and by renegotiating better terms and conditions for leasing contracts. Due to the Easter travel not starting until April, total sales for the first quarter decreased by 3.8% to EUR 761.8 million (previous year: EUR 791.9 million). Revenue per available seat kilometer fell to 6.54 Eurocents (previous year: 7.10 Eurocents). airberlin’s operating loss (EBIT) for the first quarter slightly decreased by 3% to EUR -182.8 million (previous year: EUR -188.4 million).
“In the first quarter of 2014, our Turbine turnaround program clearly demonstrated tangible effects. We have improved our cost structure and will continue along this path. This year, we will be focusing particularly on increasing our turnover and will be substantially assisted by a new revenue management system. Furthermore, we are restructuring our company and providing airberlin with a long-term perspective,” stated Wolfgang Prock-Schauer, airberlin’s CEO, who also called upon Germany’s authorities to put more emphasis on creating a positive business environment for the aviation industry including the abolishment of the aviation tax.
Recapitalization successfully concluded in May
Following the convertible bond of EUR 300 million subscribed to by Etihad Airways, the further steps of the recapitalization that was started at the end of April, after the first quarter, could already be completed entirely by mid-May. With two new bonds, one in euros and one in Swiss francs, airberlin raised a total of EUR 252 million. The company will use the proceeds from the two new bonds for general business purposes, up to EUR 150 million, to refinance existing commitments, and to redeem existing bonds maturing in 2014 and 2015, at favorable market conditions. With these measures, airberlin is strengthening its equity capital and improving its liquidity position.
As Chief Financial Officer Ulf Hüttmeyer stated: “By recapitalizing, we have provided the company with a significantly more robust financial structure, which will also be reflected in the balance sheet over the coming quarters. This gives airberlin room to concentrate on the operational side of the business, and on the successful restructuring.”
Restructuring kicked-off
Following the successful recapitalization in the second quarter of the year, airberlin has set the course for a fundamental restructuring. Chief Restructuring Officer (CRO) Marco Ciomperlik is strengthening the Management Board and will be coordinating and controlling the restructuring and turnaround process. In addition, airberlin will receive support from external consultants Strategy& and AlixPartners who, together with the Management Board, will develop a viable and sustainable business model and a detailed plan for its implementation.
“There is no doubt of the need for fundamental change. Now we have an adequate capital base and are taking the necessary steps that will deliver the operational and financial transformation required to ensure the sustainability of this business, in the best interest of our guests, business partners and employees,” stated Wolfgang Prock-Schauer.
Increased productivity in the first quarter results in more flights on offer
Despite diminishing its fleet size and a staff reduction of more than 600 employees since the beginning of the year 2013, airberlin increased the number of flights on offer by 4.4% in the first quarter, as a result of an increase in productivity. By further optimizing its flight route network, the company is able to even out seasonal peaks and strengthen its position in the market. Fleet production rose by 1.2% to over 96,235 productive hours, with a significantly reduced fleet. This corresponds to a productivity increase of 6.8%.
Partnerships continue to show very positive developments in the first quarter
During the first months of the year, airberlin continued to record a favorable growth in the number of codeshare passengers as a result of its partnerships with other airlines. Compared to the same quarter of the previous year, the number of passengers on the flight route network shared with Etihad Airways rose by 12% to 139,000. This positive development will continue throughout the course of the year by adding new codeshare routes to India and South Korea, and by increasing the connection frequency between Berlin and Abu Dhabi to two connections per day in the fall of this year.
airberlin’s membership of the oneworld® alliance continues to progress very well. The number of passengers on codeshare routes for the first quarter increased to over 117,000, as compared to 103,000 last year.
airberlin is one of the leading airline companies in Europe and flies to 171 destinations worldwide over the course of the year. In 2013, Germany’s second-largest airline company transported more than 31.5 million passengers. With its strategic partnership with Etihad Airways, which has a participation of 29.21 percent in airberlin, and its membership in the airline alliance, oneworld, airberlin has access to a global flight route network. The airline with the award-winning service operates codeshare flights with 16 airlines throughout the world. With an average age of five years, airberlin’s fleet is one of the youngest and ecologically most efficient in Europe.
